Major US power player backs EU-style carbon trading

After the publication of the Stern Review on climate change, the world is waiting for reactions from the US, the largest contributor to global warming and one of the few countries that didn't sign up to the Kyoto Protocol.

In an exclusive interview with EurActiv, John Krenicki, president and CEO of GE Energy, one of the leading energy companies, says that his company is already investing in clean-energy technologies in anticipation of a carbon-trading process similar to that of the EU.

We want to highlight some excerpts from the interview (full version), because it is important to take a nuanced view on how the US position on climate change evolves. It is too easy to accuse all American actors of inaction. Moreover, as revealed in a recent MIT survey, American citizens now rank climate change as the country's most pressing environmental problem - a dramatic shift from three years ago, when they ranked climate change sixth out of 10 environmental concerns. Clearly then, America is changing its mind on the issue, albeit slowly, with a growing number of individual States, mayors and corporations openly calling for action to be taken at federal level.

John Krenicki, president and CEO of GE Energy, a power equipment supplier involved in wind turbines, clean coal, and other clean energy technologies, said he believes that curbing greenhouse-gas emissions is "the right thing to do".

Asked whether a cap-and-trade system for carbon dioxide emissions like the EU Emissions Trading Scheme (EU-ETS) would be desirable in the US, Krenicki said: "Our view is that something similar will happen. It may not be the same but our sense is that there will be some value associated with carbon in the future."

Krenicki even suggests it could be happening sooner rather than later. "We're going to have an election in the US shortly and then another election in two years - we'll leave that to the politicians," he said.

EU business organisations have criticised the EU-ETS, saying placing a price on carbon dioxide emissions forces electricity prices up and undermines Europe's global competitiveness. But Krenicki seems to take the opposite view. "We think the drive to be more efficient makes us more competitive. So, we don't see [the EU-ETS] as hampering our competitiveness."

And as one of the world's three largest manufacturers of nuclear power plants, GE's Krenicki says nuclear has to be part of the picture:
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"As CO2 has value, nuclear is the largest or most significant option to generate zero CO2 electricity. The other thing with nuclear is that once installed, it is the lowest cost to run and emits no CO2 so it's a real viable option."

In the US, more than 266 mayors have signed the US Mayor's Climate Protection Agreement and, in California, Governor Arnold Scharzenegger recently signed a strong climate-change law for his state.

Although it is unlikely that the US will ever sign the Kyoto Protocol, negotiations are ongoing on what to do after 2012 when its targets expire. The 12th session of the UNFCCC, the convention in which Kyoto is framed, will try to address this when it meets in Nairobi, Kenya, from 6 to 17 November. The US is a party to the UNFCCC but not to Kyoto.